Boundary Commission for Wales

Baroness Ashton of Upholland: My honourable friend the Parliamentary Under-Secretary of State (Bridget Prentice) has made the following Written Ministerial Statement.
	My noble and learned friend the Lord Chancellor and Secretary of State for Justice has received notice in writing from the Boundary Commission for Wales of commencement of an interim review. The review will be of the boundaries of the parliamentary constituencies of Neath county constituency and Brecon and Radnorshire county constituency and will be based on the number of electors on the electoral register at 1 June 2007. The review will include consideration of proposals for the Assembly constituencies and electoral regions as required by the Government of Wales Act 1998.

Department of Trade and Industry: Annual Report and Resource Accounts

Lord Truscott: My honourable friend the Parliamentary Under-Secretary of State for Employment Relations and Postal Services (Jim Fitzpatrick) has made the following Written Ministerial Statement.
	After consultation with the Trade and Industry Select Committee and the Science and Technology Select Committee, the Secretary of State for Trade and Industry has decided to publish the DTI's annual departmental report and its resource accounts for 2006-07 in a single, combined document this year.
	This approach has been adopted as a trial project by the DTI and HM Treasury. It is intended to make departmental reporting more accessible to Parliament and the public by removing some of the confusion resulting from the differences and overlap between the two reports.
	Previously, the DTI's stand-alone departmental report was published in May, with the resource accounts following in July. The timing of publication of the combined report will be aligned with that of the resource accounts, and publication is expected to take place before the Summer Recess.
	I note that this Statement coincides with HM Treasury's publication of its combined report today.

EU: Economic and Financial Affairs Council

Lord Davies of Oldham: My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Statement.
	The Economic and Financial Affairs Council was held on 8 May in Brussels. The UK was represented by the Economic Secretary to the Treasury, Ed Balls. The items discussed were as follows.
	Preliminary Draft of the 2008 General Budget
	Commissioner Grybauskaite, responsible for financial planning and the budget, gave a presentation on the Commission's preliminary draft 2008 EC budget. She emphasised that, for the first time, spending on growth and employment policies will represent the highest share of the budget, ahead of agriculture and natural resources. Ministers noted the presentation of the preliminary draft budget.
	Financial Markets
	Hedge Funds
	Ministers adopted conclusions on hedge funds, noting the role that hedge funds play in providing liquidity, helping markets price assets more accurately and driving financial innovation, but also that authorities should continue to remain vigilant with regard to any potential risks. The UK supported the conclusions, highlighting the need to ensure that any actions taken are proportionate, risk-based and properly designed so that they achieve the intended outcomes. The Financial Services Authority is responsible for regulating hedge fund managers in the UK and has put in place a rigorous regulatory framework to mitigate the risks associated with hedge fund activity.
	White Paper on Asset Management
	Ministers adopted conclusions on the Commission's White Paper on enhancing the single market framework for investment funds. Commissioner McCreevy, responsible for the internal market and services, welcomed the endorsement by the Council of the Commission's approach to this issue, as set out in its white paper. The UK supported the conclusions and supports the Commission's proposals for reform of the UCITS framework.
	Ageing and Financial Markets
	Ministers adopted conclusions on a Financial Services Committee report on the implications of ageing populations for financial markets. Ministers agreed on the importance for finance Ministers and for the financial services industry of Europe's ageing population, and commended the FSC report. The UK is focusing on pensions reform and is at the forefront of tackling a number of the issues that the report raises, for instance through the provision of cost-efficient savings products, as with stakeholder pensions, consideration of innovative ideas to encourage take-up, such as automatic enrolment, and the need to strengthen the financial capability of consumers.
	Inter-institutional Monitoring Group (IIMG): Second Interim Report Monitoring the Lamfalussy Process
	Johnny Akerholm, chair of the Inter-institutional Monitoring Group on the Lamfalussy process, presented the group's interim report and said that the final report would be completed in October. Substantial progress had been made, and the UK looks forward to the final report.

Lord Davies of Oldham: My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Statement.
	The Economic and Financial Affairs Council will be held on 5 June in Luxembourg. The items on the agenda are as follows.
	Implementation of the Stability and Growth Pact: Excessive Deficit Procedures
	Ministers will be asked to agree conclusions abrogating the excessive deficit procedures on Malta, Germany and Greece. In January 2003, the Council decided that Germany's deficit of 3.7 per cent of GDP in 2002 was excessive and gave it a deadline of 2004 to correct this. The deadline was subsequently extended to 2005 and then to 2007, as the deficit remained above 3 per cent. In 2006, the deficit fell to 1.7 per cent of GDP.
	The EDP was started on Greece in 2004 on the basis of a deficit of 3.2 per cent of GDP in 2003. In January 2005, the Council concluded that no effective action had been taken to correct this and gave Greece notice to bring the excessive deficit to an end by 2006. In 2006, the deficit was 2.6 per cent of GDP.
	Malta was deemed to be in excessive deficit in July 2004, following a deficit of 9.7 per cent of GDP in 2003. It was given a deadline of 2006 and last year the deficit declined to 2.6 per cent of GDP.
	Convergence Reports by the Commission and the European Central Bank
	Ministers will discuss the convergence reports of the Commission and the ECB for Cyprus and Malta, and Commission proposals for the abrogation of their derogations and for a regulation on the introduction of the euro. This would allow both countries to join the euro as planned on 1 January 2008. This will next be discussed by heads of state and government at the European Council on 21 to 22 June.
	Quality of Public Finances
	This follows up from the discussion at the informal ECOFIN. The Council will receive a report from the Economic Policy Committee on the efficiency and effectiveness of public finances, focusing in particular on the need to improve the measurement of public sector output. The Council is also expected to adopt conclusions on these matters.
	Tax
	Combating Tax Fraud: Ministers will be asked to agree Council conclusions on conventional measures and more radical solutions to combat VAT fraud, including German ideas on the wide reverse charge.
	VAT Package: Ministers will discuss a package of measures to modernise the EU VAT regime for the cross-border supply of services.
	Common Consolidated Corporate Tax Base: There will be an orientation debate on the CCCTB. The UK does not believe that the competitiveness of the EU would be helped by a harmonised company tax base and remains sceptical about both the principles and the practicalities.
	Code of Conduct on Business Taxation: The report of the code group (chaired by the UK's Paymaster-General, Dawn Primarolo), including a proposed future work programme, will be adopted through conclusions.
	Joint Transfer Pricing Forum: The forum is a body of tax officials from the member states and business representatives. It has agreed guidelines on the handling of arrangements relating to the tax treatment of certain cross-border transactions between related businesses.

Financial Disclosure: Davies Review

Lord Davies of Oldham: My honourable friend the Economic Secretary to the Treasury (Ed Balls) has made the following Written Statement.
	My Written Statement of 26 October 2006 announced the appointment of Professor Paul Davies QC, the Cassel Professor of Commercial Law at the London School of Economics, to conduct a formal review of the liability of issuers in respect of damage or loss suffered as a consequence of inaccurate, false or misleading information disclosed by issuers or their managements to financial markets (including to their own shareholders or bondholders) or of failure to disclose relevant information promptly or at all. My Written Statement of 26 January 2007 set out the review's terms of reference.
	Professor Davies has today published his final report and copies are available in the House Library and the Vote Office.
	The review recommends that the Government should maintain a statutory regime for liability in damages of issuers in respect of financial disclosures and that changes should be made to extend the regime currently set out in Section 90A of the Financial Markets and Services Act 2000. Accordingly, the Government will consult fully on their response to the review's proposals and publish a full regulatory impact assessment of these proposals.

Government Assets

Lord Truscott: My right honourable friend the Secretary of State for Trade and Industry (Alistair Darling) has made the following Written Ministerial Statement.
	On 20 July 2006 (Official Report, Commons, col. 51WS), I informed the House that the Government would actively consider a sale of part of its interest in British Energy (BE) via a capital markets transaction. This interest is held by the Nuclear Liabilities Fund (NLF). On 30 May, I announced that the Government intended to direct the NLF to sell part of its interest in BE through an equity capital markets transaction and that, further to this, the sale process completed at 4.30 pm on 31 May. A total of 450 million shares have been sold through an accelerated book-built offering at a price of 520p per share, raising gross proceeds of approximately £2.34 billion. This includes the exercise of an over-allotment option that has resulted in the sale of 50 million shares.
	The NLF is a segregated fund set up at the time of BE's privatisation in 1996 to meet the eventual decommissioning costs of the company's eight existing nuclear power stations. In 2002, when BE was facing an uncertain future and was seeking funding so that it could continue to meet its obligations, the Government stepped in to support a restructuring of the company in order to ensure the safety of nuclear power and the security of electricity supplies. As part of the restructuring, which came into effect in 2005, the NLF was given £275 million in company bonds and the contractual right to receive a proportion of the company's annual adjusted free cash flow. The NLF has the right to convert all or part of this "cash sweep" into shares in BE, which can then be sold on to a third party.
	It has been the Government's objective, through this sale, to diversify the NLF's assets, of which 87 per cent had been linked to BE, and therefore reduce the level of risk in its investment. All net proceeds from the sale will go to the NLF, helping to ensure that it is better placed to meet its obligations in relation to the eventual decommissioning costs of BE's nuclear power stations.
	The NLF will convert its contractual entitlement to part of the cash sweep in proportion to the number of shares sold. The disposal will reduce the NLF's economic interest in BE by way of the cash sweep from approximately 64 per cent to approximately 36 per cent (including the over-allotment option). The Government will not direct the NLF to make any further sale of its interest in BE for 90 days from the closing date of the offering. The Government do not intend to direct the NLF to reduce its economic interest in BE by way of the cash sweep to below a strategic interest of 29.9 per cent.
	The Government and the NLF have appointed Lazard as independent financial advisers and Citigroup Global Markets UK Equity Limited, Deutsche Bank AG and Merrill Lynch International to act as joint book-runners in relation to the transaction.